Exhibit 10.4


 


OSIRIS THERAPEUTICS, INC.


 


PROMISSORY NOTE


 


SUBSCRIPTION DOCUMENTS


 





















 


SUBSCRIPTION INSTRUCTIONS


 


To subscribe for notes of
Osiris Therapeutics, Inc., a prospective investor must complete the
Subscription Documents.  Specifically, a
prospective investor must:


 


1.                                      Read the
Subscription Agreement in its entirety and confirm that all of the
representations and warranties of the Subscriber are true, complete and
correct.


 


2.                                      Complete, sign
and date the Subscriber Signature Page to the Subscription Agreement on page 11
of the Subscription Agreement.


 


3.                                      Complete the
Subscriber Information requested on page 13 of the Subscription Agreement.


 


4.                                      Fax all of the
fully executed Subscription Documents to:


 


Osiris
Therapeutics, Inc.


Attention:  Chief Financial Officer


Fax:  011-443-378-8820


 


5.                                      Overnight
Courier all of the fully executed Subscription Documents to:


 


Osiris
Therapeutics, Inc.


7015 Albert Einstein Drive


Columbia, MD USA 21046


Attention:  Chief Financial Officer


 


If you have any questions
concerning the completion of the Subscription Documents, please contact Philip
R. Jacoby, Jr., Interim Chief Financial Officer (011-443-545-1819).


 





















 


THE NOTE TO BE ACQUIRED BY THE SUBSCRIBER PURSUANT TO THIS SUBSCRIPTION
AGREEMENT HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION, AND NEITHER THE NOTE NOR ANY CONVERSION SHARES MAY BE
OFFERED, SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S.
PERSON, OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S PROMULGATED UNDER
THE SECURITIES ACT (“REGULATION S”)), IN THE ABSENCE OF SUCH REGISTRATION,
UNLESS SUCH TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO REGISTRATION UNDER THE
SECURITIES ACT, AND THE SUBSCRIBER HAS, IF REQUIRED BY THE COMPANY, DELIVERED
AN OPINION OF COUNSEL TO THAT EFFECT.  BY
ENTERING INTO THIS SUBSCRIPTION AGREEMENT, SUBSCRIBER REPRESENTS, AMONG OTHER
THINGS, THAT IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a) OF
THE SECURITIES ACT) AND IS NOT A U.S. PERSON, AND IS ACQUIRING THE NOTE
PURSUANT HERETO OUTSIDE THE U.S. AND IN ACCORDANCE WITH REGULATION S, AND WILL
NOT ENGAGE IN ANY HEDGING TRANSACTIONS WITH RESPECT TO THE COMMON
STOCK OR NOTES OF THE COMPANY PRIOR TO THE EXPIRATION OF THE DISTRIBUTION
COMPLIANCE PERIOD (AS DEFINED IN REGULATION S) EXCEPT IN COMPLIANCE WITH THE
SECURITIES ACT.


 


OSIRIS THERAPEUTICS, INC.


 


SUBSCRIPTION AGREEMENT


 


	
  Name
  of Subscriber:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address
  of Subscriber:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Purchase
  Price:

  	
   

  	
  US
  $1,500,000.00

  	
   

  



 


TO:         Osiris Therapeutics, Inc., a
Delaware corporation (the “Company”).


 


The Subscriber hereby agrees
to loan and advance to Company, and to purchase from the Company at the Closing
provided for herein below, and the Company agrees to sell and deliver to the
Subscriber, an unsecured promissory note of the Company (the “Note”) in the original principal sum of $1,500,000.00
(the “Principal Amount”), in substantially
the form of promissory note attached hereto as Exhibit A.


 


1





















 


A.            Payment.  In connection with this Subscription
Agreement and subject to acceptance by the Company, the Subscriber hereby
agrees with the Company as follows:


 


(1)           The issuance of the Note offered or subscribed for
pursuant hereto will occur at a Closing to be held on June 12, 2008 (the “Closing Date”).  On
the Closing Date, the Subscriber will pay to the Company the Principal Amount
in immediately available funds, by wire transfer as directed by the
Company.  Upon the Subscriber’s payment
in full of the Principal Amount as contemplated by this Part A(1), the
Company shall deliver to the Subscriber the Note, fully executed on behalf of
the Company.


 


B.            Acknowledgments and
Covenants.


 


(1)           The Subscriber hereby agrees to pay all costs and expenses
incurred by or on behalf of the Company, including reasonable attorneys’ fees
and disbursements, in connection with enforcing the Subscriber’s obligations
under this Subscription Agreement in the event of any default in respect of its
obligations hereunder.


 


(2)           Under Section 1445(e) of the Internal Revenue
Code of 1986, as amended (the “Code”), the
Company must withhold tax with respect to certain transfers of property
involving a foreign person.  To inform
the Company whether withholding is required, the Subscriber shall complete a Form W-9
or applicable Form W-8.


 


C.            Representations and
Warranties.


 


Subscriber
Representations and Warranties.


 


The
Subscriber warrants, represents and agrees with the Company as follows:


 


(1)           Upon acceptance by the Company, this Subscription
Agreement is irrevocable and shall constitute a binding commitment of the
Subscriber.


 


(2)           The principal address of Subscriber is outside of the
United States, and Subscriber is not a U.S. Person as such term is defined and
used in Regulation S (“Regulation S”)
promulgated under the Securities Act of 1933, as amended (the “Securities  Act”).


 


(3)           At the time the “buy” order was originated in respect of
Subscriber’s acquisition of the Note pursuant to this Subscription Agreement,
Subscriber was outside of the U.S., and Subscriber is outside the U.S. as of
the date of the execution and delivery of this Subscription Agreement by Subscriber.  No offer to acquire the Note pursuant to this
Subscription Agreement or otherwise to acquire the Note was made to Subscriber
or its representatives inside the U.S.


 


(4)           Subscriber is acquiring the Note for his/her/its own
account, not on behalf or for the account of any U.S. Person, and the purchase
of the Note has not been pre-arranged with a purchaser in the U.S.


 


2





















 


(5)           The Subscriber will make all resales of the Note only
outside of the U.S. in compliance with Regulation S, or pursuant to a
registration statement under the Securities Act, or pursuant to an available
exemption from registration under the Securities Act.  Specifically, Subscriber will not resell the
Note to any U.S. Person or within the United States prior to the expiration of
one (1) year (the “Distribution  Compliance Period”), except pursuant to registration under
the Securities Act or an exemption from registration under the Securities Act.


 


(6)           Subscriber will not engage in any hedging transactions
with respect to this Note or any similar note of the Company, or with respect
to the Common Stock of the Company, at any time prior to the expiration of the
Distribution Compliance Period, except in compliance with the Securities Act.


 


(7)           The Company is and will be relying on the truth and
accuracy of Subscriber’s representations, warranties, agreements,
acknowledgements and understandings as set forth herein, in order to determine
the applicability of such exemptions and the suitability of Subscriber and
his/her/its acquisition of the Note.


 


(8)           Subscriber has been furnished with, or has acquired,
copies of all of the documents filed by the Company with the United States
Securities and Exchange Commission during the twelve (12) months prior to the
date hereof, as well as all other documents made available by the Company for
public dissemination during the same period, including, but not limited to,
press releases, and Subscriber has been provided all necessary and appropriate
information about the Company to make an informed investment decision with
respect to the acquisition of this Shares. 
WITHOUT LIMITING THE FOREGOING, THE SUBSCRIBER ACKNOWLEDGES THAT THE
ACQUISITION OF THE NOTE INVOLVES SUBSTANTIAL RISK AND THE SUBSCRIBER MAY LOSE
ITS ENTIRE INVESTMENT.


 


(9)           Subscriber has sufficient knowledge and experience in
financial and business matters and is capable of evaluating the risks and
merits of Subscriber’s acquisition of the Note; Subscriber has been provided
the opportunity to make all necessary and appropriate inquiries of the Company
regarding the Company’s business and associated risks, and the Company has
complied with all such requests; and Subscriber is able financially to bear the
risk of losing Subscriber’s full investment in the Note.


 


(10)         The Note is being acquired in a transaction not involving a
public offering within the United States within the meaning of the Securities
Act, and Subscriber understands that the Note has not been and may not be,
registered under the Securities Act or registered or qualified under any the
securities laws of any state or other jurisdiction, is and will be “restricted
securities” and cannot be resold or otherwise transferred unless registered
under the Securities Act, and registered or qualified under any other
applicable securities laws, or an exemption from such registration and
qualification is available.  Prior to any
proposed transfer of the Note prior to any registration, Subscriber shall,
among other things, give written notice to the Company of Subscriber’s
intention to effect such transfer, identifying the transferee and describing
the 


 


3





















 


manner of the proposed transfer and, if
requested by the Company, accompanied by (i) investment representations by
the transferee similar to those made by Subscriber in this Section 10 and (ii) an
opinion of counsel satisfactory to the Company to the effect that the proposed
transfer may be effected without registration under the Securities Act and without
registration or qualification under applicable state or other securities
laws.  The Note shall bear a legend
similar to that set forth on the first page of this Subscription Agreement
(insofar as applicable) and otherwise referring to reiterating the restrictions
on transfer and other terms hereof applicable to the Note upon issuance, and
containing such other information and imposing such other restrictions as shall
be reasonably required by the Company.


 


(11)         Subscriber understands that no U.S. federal or state
government or agency has passed on or made any recommendation or endorsement of
the acquisition by Subscriber of the Note.


 


(12)         Subscriber acknowledges that there is no restriction imposed
hereby upon the Company in respect of the incurring by the Company of
additional debt or the issuance by the Company of additional debt or equity
securities, or otherwise.


 


(13)         The Note will be purchased for the account of the Subscriber
for investment only and not with a view to, or with any intention of, a distribution
or resale thereof, in whole or in part, or the grant of any participation
therein.  The Subscriber has not been
organized for the specific purpose of acquiring the Note.  The Subscriber acknowledges that the Note has
not been registered under the Securities Act, or the securities laws of any
state or other jurisdiction and cannot be disposed of unless subsequently
registered under the Securities Act and any applicable laws of states or other
jurisdictions or an exemption from such registration is available.


 


(14)         The Subscriber is an “accredited investor” as defined in Rule 501(a) of
Securities and Exchange Commission Regulation D, that is (i) if a natural
person, Subscriber has an individual net worth, or joint net worth with the
Subscriber’s spouse, at the time of the Subscriber’s purchase in excess of  $1,000,000; or (ii) if a corporation,
business trust or a partnership, Subscriber was not formed for the specific
purpose of acquiring the Shares, and has total assets in excess of $5,000,000.


 


(15)         The Subscriber acknowledges that at no time was the
Subscriber presented with, or solicited by, any leaflet, public promotional
meeting, newspaper or magazine article, radio or television advertisement or
any other form of general advertising or general solicitation with respect to
the Company.


 


(16)         If the Subscriber is an entity, the Subscriber is duly
organized or, if a trust, duly established pursuant to a valid trust
instrument, validly existing and in good standing under the laws of the
jurisdiction wherein it is organized and has the power and authority to carry
on the activities in which it is engaged and to acquire the Note.  This Subscription Agreement and any other
documents executed and delivered by the Subscriber in connection therewith or herewith
have been duly authorized, executed and 


 


4





















 


delivered by the Subscriber, and are the
legal, valid and binding obligations of the Subscriber enforceable in
accordance with their respective terms.


 


(17)         The execution and delivery of this Subscription Agreement
and any other documents executed and delivered by the Subscriber in connection
herewith do not, and the performance and consummation of the terms and
transactions set forth or contemplated therein or herein will not, contravene
or result in a default under any provision of existing law or regulations to
which the Subscriber is subject, the provisions of the trust instrument,
charter, bylaws or other governing documents of the Subscriber (if the Subscriber
is an entity) or any indenture, mortgage or other agreement or instrument to
which the Subscriber is a party or by which it is bound and does not require on
the part of the Subscriber any approval, authorization, license, or filing from
or with any foreign, federal, state or municipal board or agency which has not
been obtained.


 


(18)         The Subscriber represents and warrants that the amounts paid
or to be paid by it to the Company in respect of this Subscription Agreement
were not and are not directly, or to the Subscriber’s knowledge indirectly,
derived from activities that contravene federal, state or foreign laws and
regulations, including anti-money laundering and terrorist financing laws and
regulations.  Federal regulations and Executive
Orders administered by the U.S. Treasury Department’s Office of Foreign Assets
Control (“OFAC”) prohibit, among other things,
the engagement in transactions with, and the provision of services to, certain
foreign countries, territories, entities, and individuals.  The lists of OFAC prohibited countries,
territories, persons and entities can be found on the OFAC website at
www.treas.gov/ofac.


 


(19)         The Subscriber represents and warrants to, and agrees and
covenants with, the Company, as of the date hereof, that, to the best of its
knowledge, none of (i) the Subscriber, (ii) any person controlling or
controlled by the Subscriber, (iii) if the Subscriber is a privately held
entity, any person having beneficial interest in the Subscriber, and (iv) any
person for which the Subscriber is acting as agent or nominee in connection
with this Subscription Agreement, is a country, territory, individual or entity
named on the OFAC lists, nor is any such person or entity prohibited from
investing in the Company under any OFAC administered sanctions or embargo
programs.


 


(20)         The Subscriber agrees promptly to notify the Company should
the Subscriber become aware of any change in the information set forth in Part (18)
or Part (19) above.  The Subscriber
acknowledges and agrees that, if required by law, the Company may be obligated
to “freeze the account” of the Subscriber, either by prohibiting additional
investments from the Subscriber and/or segregating assets of the Subscriber in
compliance with government regulations and, if required by law, the Company may
also be required to report such action and to disclose the Subscriber’s
identity to OFAC.  The Subscriber also
understands and agrees that the Company may release confidential information
about the Subscriber and, if applicable, any underlying beneficial owners of
the Subscriber, to law enforcement agencies to the extent necessary to ensure
compliance with all applicable laws, rules and regulations.


 


5





















 


(21)         The Company reserves the
right to request such information as is necessary to verify the identity of the
Subscriber, any related party, any individual or entity having a beneficial
interest in, or signatory or other similar authority over, the Subscriber and
any transferee of the Note, and may seek to verify such identity and the source
of funds for the acquisition of the Note by Subscriber.


 


(22)         If the Subscriber is acting as nominee or custodian for
another person, entity or organization in connection with the acquisition of the
Note, the undersigned has so indicated on the “Subscriber Information” page attached
hereto.  The representations and
warranties contained in this Part C regarding the Subscriber are true and
accurate with regard to both the Subscriber and the person, entity or other
organization for which the undersigned is acting as nominee or custodian.  The person, entity or organization for which
the undersigned is acting as nominee or custodian will not transfer or
otherwise dispose of or distribute any part of its economic or beneficial
interest in (or any other rights with respect to) the Note without complying
with all of the applicable provisions of this Subscription Agreement and
applicable law, as if such person, entity or organization were a holder of the
Note.  If the undersigned is acting as
nominee or custodian for another person, entity or organization, the
undersigned agrees to provide such other information as the Company may
reasonably request regarding the undersigned and the person, entity or organization
for which the undersigned is acting as nominee or custodian in order to
determine the eligibility of the Subscriber to acquire the Note.


 


Company
Representations and Warranties.


 


By
accepting the Subscriber’s subscription, the Company warrants, represents and
agrees with the Subscriber as follows:


 


(a)           The Company is duly organized, validly existing and in
good standing as a corporation under the Delaware General Corporation Law, with
all requisite corporate power and authority to conduct its business as
currently conducted and to issue the Note in accordance with the terms of this
Subscription Agreement.  This
Subscription Agreement (when accepted) will have been duly authorized, executed
and delivered by the Company.


 


(b)           This Subscription Agreement is a legally binding
obligation of the Company, enforceable against the Company in accordance with
the terms hereof, except to the extent that (i) such enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors’ rights, and (ii) the
availability of the remedy of specific performance or in injunctive or other
equitable relief is subject to the discretion of the court before which any
proceeding therefore may be brought.


 


D.            Assignment, Survival,
Effectiveness and Further Information.


 


(1)           This Subscription Agreement is not assignable by either
the Subscriber or the Company without the prior written approval of the other
party in its sole and absolute discretion.  This Subscription Agreement shall be binding
upon the successors and any 


 


6





















 


permitted assigns of the Subscriber and, when
accepted by the Company, shall be binding upon the successors and any permitted
assigns of the Company.


 


(2)           All of the agreements, covenants, representations and
warranties made by the Subscriber in this Subscription Agreement shall survive
the execution and delivery hereof.  The
Subscriber shall use reasonable efforts to notify the Company and to do so
promptly upon discovering that any of the representations or warranties made
herein were false when made or has, as a result of changes in circumstances,
become false.  Every provision of this
Subscription Agreement is intended to be severable, and if any term or
provision hereof is held to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the validity of the remainder
hereof.


 


(3)           The agreements of the Subscriber set forth herein shall
become effective and binding upon the Subscriber, without right of revocation,
upon the Company’s acceptance of this Subscription Agreement.


 


E.            Miscellaneous.  Unless otherwise indicated, the address on
the first page of this document is the legal residence of the Subscriber,
and all offers and communications in connection herewith have been conducted at
such address.  The Subscriber, if a
foreign entity, represents that it has complied with all of the laws, if any,
of its country of residence and incorporation applicable to the acquisition of
the Note subscribed to herein.


 


F.             Remedies.  The Subscriber understands the meaning and
legal consequences of its covenants, representations and warranties contained
herein, and hereby agrees that the Company may recover from the Subscriber, and
the Subscriber shall hold the Company harmless from, any and all loss, damage
or liability due to or arising out of any breach of any such covenant,
representation or warranty.


 


G.            Communication.  Any notice, demand, request or other
communication which may be required or contemplated herein (including delivery
of this Subscription Agreement by and between the parties hereto) shall be
sufficiently given or delivered if (i) given either by facsimile
transmission (with confirmation of receipt), by reputable overnight delivery
service, postage prepaid, or by registered or certified mail, postage prepaid
and return receipt requested, to the address indicated herein or to such other
address as any party hereto may specify as provided herein, or (ii) delivered
personally at such address.


 


H.            Applicable Law.  This Subscription Agreement and all legal
relations, claims or obligations arising out of this transaction shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to conflicts of law provisions.


 


I.             Confirmation of
Representations; Additional Information.  Upon request of the Company, the Subscriber
shall confirm the accuracy of the representations in this Subscription
Agreement to the Company as of the Closing Date and will use reasonable efforts
to notify the Company and to do so promptly if the Subscriber becomes aware
that such representations are, at any time, inaccurate in any respect.  In addition, the Subscriber hereby agrees to
respond reasonably to requests to supply any additional written information
concerning the representations in this Subscription Agreement that the Company
may reasonably request.


 


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J.             Indemnification.  The Subscriber shall indemnify and hold
harmless the Company and its agents and affiliates (collectively, the “Indemnified Persons”) from and against any losses, claims,
damages, liabilities, costs or expenses to which any of them may become subject
arising out of or based upon any false representation or warranty, or any
breach of or failure to comply with any covenant or agreement, made by the
Subscriber in this Subscription Agreement or in any other document furnished to
the Company in connection with the Subscriber’s investment in the Company.  The Subscriber will reimburse each
Indemnified Person for his, her or its reasonable legal and other expenses
(including the cost of any investigation and preparation) as they are incurred
in connection with any action, proceeding or investigation arising out of or
based upon the foregoing.  The indemnity
and reimbursement obligations of the Subscriber under this Part K shall be
in addition to any liability which the Subscriber may otherwise have.


 


K.            General.  This Subscription Agreement may be executed
in counterparts with the same effect as if the parties executing the
counterparts had all executed one counterpart. 
This Subscription Agreement and the documents specifically referred to
herein constitute the entire agreement among the parties hereto pertaining to
the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings of the parties in connection therewith.  Neither this Subscription Agreement nor any
provision hereof may be waived, modified, discharged or terminated except by an
instrument in writing signed by the party against whom such waiver,
modification, discharge or termination is sought to be enforced.  Each provision of this Subscription Agreement
shall be considered separable and if for any reason any provision or provisions
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those portions of
this Subscription Agreement which are valid.


 


*                              *                              *                              *                              *


 


8





















 


IN WITNESS WHEREOF, the
Subscriber has executed this Subscription Agreement to OSIRIS THERAPEUTICS,
INC., Inc. this 10 day of June, 2008.


 


 


	
  Name
  of Subscriber:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Hereunto
  duly authorized

  	
   

  
	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Principal
  Amount:

  	
  US
  $1,500,000.00

  	
   

  
					



 


[SUBSCRIBER SIGNATURE PAGE]


 


9





















 


ACCEPTANCE


 


	
  Name
  of Subscriber:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Principal
  Amount:

  	
  US
  $1,500,000.00

  	
   

  



 


The foregoing Subscription
Agreement is hereby accepted upon the terms and conditions set forth herein.


 


 


	
   

  	
  OSIRIS
  THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
    Philip
  R. Jacoby, Jr.

  
	
   

  	
   

  	
  Title:

  	
    Interim
  Chief Financial Officer

  



 


Dated:  June         ,
2008


 


10





















 


SUBSCRIBER INFORMATION


 


	
  Name
  of Subscriber:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Type
  of Entity:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Subscriber’s
  jurisdiction of organization:

  	
   

  	
   

  
	
   

  	
   

  	
  (Country
  and, if applicable, State)

  
	
   

  	
   

  	
   

  
	
  Subscriber’s
  principal place of business or principal residence:

  	
   

  	
   

  
	
   

  	
   

  	
  (Country
  and, if applicable, State)

  
	
   

  	
   

  	
   

  
	
  Mailing
  address for all written notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social
  Security or Tax ID No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Principal
  Amount:

  	
   

  	
  US
  $1,500,000.00

  



 


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